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Why Mobile Wallets Are Doomed

Soulskill posted about 3 months ago | from the all-about-the-mobile-benjamins dept.

The Almighty Buck 272

redletterdave writes: "The other shoe has dropped for Square. The once-hyped mobile payments company is killing off its Wallet payments app and replacing it with a new app called Order, which will allow users to order food and beverages ahead of time at their favorite cafes and restaurants. For entrepreneurs, the concept of a mobile wallet seems so logical that the payments industry looks like it's ripe for disruption. If everybody is always carrying around a powerful computer in their pockets, it's natural to consider loading payment information onto that secure device as an alternative to cash or plastic cards. The problem comes when this logical entrepreneurial spirit merges with an industry segment that is classically illogical. The payments system in the United States is a mess of entrenched interests, fragmented business opportunities, old infrastructure (like point-of-sale systems), back room handshakes and cut throat competition. This behavior is not going to change any time soon, which means mobile wallets like Square are going to continue to struggle — at least until a more legitimate, easy-to-use and cost-effective solution comes along."

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You mean.... (1, Interesting)

wbr1 (2538558) | about 3 months ago | (#46992481)

This behavior is not going to change any time soon, which means mobile wallets like Square are going to continue to struggle — at least until a more legitimate, easy-to-use and cost-effective solution comes along."

Like a usable cryptocoin?

Re:You mean.... (2, Insightful)

Anonymous Coward | about 3 months ago | (#46992513)

Cryptocoins are a solved problem. It's being able to store them securely that is the problem. They draw hackers like moths to a flame.

Re:You mean.... (4, Insightful)

SpankiMonki (3493987) | about 3 months ago | (#46992623)

Cryptocoins are a solved problem. It's being able to store them securely that is the problem.

IOW, the cryptocoin problem isn't solved.

Re:You mean.... (1)

Anonymous Coward | about 3 months ago | (#46993469)

IOW, the cryptocoin problem isn't solved.

Even the basics haven't been solved, like how to provide anonymity on both sides of the transaction. Storing them is easy in comparison; your 'wallet' can be encrypted, and you can keep a backup copy of your money in case it's stolen.

Re:You mean.... (1)

Anonymous Coward | about 3 months ago | (#46992655)

Hack attempts are not unique to cryptocoins... they are true of any system involving money.

Re:You mean.... (3, Insightful)

GameboyRMH (1153867) | about 3 months ago | (#46992663)

"Oh sorry you'll have to send me more money, the value of this cryptocurrency dropped 20% in the 5 seconds it took to process the transaction."

Re:You mean.... (4, Insightful)

Archangel Michael (180766) | about 3 months ago | (#46993115)

Rapid Price Changes are part of a infantile system. As the system matures, and becomes wider spread, pricing will stabilize. The problem is what to do in the meantime. Right now, people with patience will make a minor fortune, provided that the market exists in the future. In the mean time, it is not for the faint of heart.

If I were a merchant, I would be accepting BitCoins as fast as I could, as the opportunity is there right now, with enough patience.

Obligatory Ubersoft (0)

Anonymous Coward | about 3 months ago | (#46992487)

Here. [eviscerati.org]

WTF does it do for me? (4, Insightful)

alen (225700) | about 3 months ago | (#46992505)

why is paying by phone so much better than with plastic?
i do it starbucks for the rewards
only other reason is if a food truck took cards instead of cash. why do it anywhere else?

for the retailers its more money to spend with no return on investment

Re:WTF does it do for me? (2, Insightful)

Anonymous Coward | about 3 months ago | (#46992559)

so your the one guy in the line of 20 in the morning that sits there dicking around passing his phone back and fort while we all wait to pay with actual money in a timely fashion

Re:WTF does it do for me? (4, Informative)

The Good Reverend (84440) | about 3 months ago | (#46992587)

Where are you buying coffee? All the Starbucks around here have phone scanners on the counter, and the exchange is at least a few seconds quicker than handing over a credit card or dealing with cash (and change).

Re:WTF does it do for me? (0)

Anonymous Coward | about 3 months ago | (#46992773)

try the drive through.

Re:WTF does it do for me? (3, Informative)

The Good Reverend (84440) | about 3 months ago | (#46992831)

The scanner has a wire long enough to pull through the window, so I don't even need to hand them my phone. That's been the case at every Starbucks drive-thru around here, and even if it didn't, it would still be faster than a credit card or cash/change.

Re:WTF does it do for me? (1)

alen (225700) | about 3 months ago | (#46992897)

i make sure to be as slow as the pay by check people in supermarkets

Re: WTF does it do for me? (-1)

Anonymous Coward | about 3 months ago | (#46992941)

Yes. You gotta a problem with that?

Re:WTF does it do for me? (2)

jythie (914043) | about 3 months ago | (#46992955)

Well, their idea was that buying and selling should be more 'social', so it was not just 'pay by phone', it was your phone announces to the store that you are in it and you tell the cashier who you are, they compare you to a photo, and deduct the money. The designer waxed poetically about bringing personal connections back to transactions, which means they probably think well of expensive boutique stores where you pay a premium for 'authenticity' or such.

Thus the benefit was never really economic or even connivence other then trying to build a technological version of walking into a place where the owner knows you by face and can charge your tab.

Re:WTF does it do for me? (4, Insightful)

alen (225700) | about 3 months ago | (#46993047)

i suspect that like with the internet of things, the consumer feature was secondary to the primary feature, to get your data

Re:WTF does it do for me? (1)

JohnFen (1641097) | about 3 months ago | (#46993065)

Seriously?! THAT was their idea? Everything about that screams "avoid using this service at all costs."

Re:WTF does it do for me? (1)

AmiMoJo (196126) | about 3 months ago | (#46993123)

Retailers get contactless payments when their card payment terminals are upgraded. It's built into the terminal, no additional hardware needed, doesn't cost them any extra.

Consumers seem to like it because it is faster and makes accounting easier. Receipts are digital and can be read directly into accounting software or emailed to the company expenses department.

Re:WTF does it do for me? (2)

duranaki (776224) | about 3 months ago | (#46993173)

I was kind of excited about Google Wallet, but it's been almost entirely a disappointment. The one place I semi-regularly have a chance to use it is at Jack in the Box, but the NFC scanner is attached to the credit card reader, and some miscreant cut the cable between the credit card reader and the machine. This has no impact on the function of the NFC scanner, mind you, yet each time I tell them I'm paying with my phone they inform me it's broken because someone cut the cable. I've shown them it still works, but every single time I get a new person who thinks it doesn't (or the same person who's forgotten) and I have to argue with them that it does actually work. I gave up. Now I just hand them my card through the window. Less arguing, thus faster. This is pretty much true even without scanner damage, too. "I'd like to pay with my phone." "What? You can do that? I don't know. What do I hit?" "Nevermind. Here's the plastic rectangle you know what to do with." Also, I'm still waiting on the solution to include those other wallet things: license, insurance cards, train pass. Some things are *almost* there.. like my train pass actually uses NFC, but there's no way to have the pass on my phone that has NFC. My insurance cards are no more "secure" than a photocopy of them, but storing pictures of the cards in my phone is going to be a tough sell when the Dr's office wants to make their own photocopy. Police can always look up your license, so a picture might be okay there, but not as proof of legal age at a bar or liquor store. So yeah.. what does it do for me? Still have to carry the same number of things and makes nothing go faster and some things even slower.

Re:WTF does it do for me? (0)

Anonymous Coward | about 3 months ago | (#46993247)

I think the problem was Google there, not the wallet concept.
 
But I am talking to someone who obviously doesn't know what a paragraph is so I'm guessing that there isn't much else to say on the matter.

Re:WTF does it do for me? (2)

Graydyn Young (2835695) | about 3 months ago | (#46993231)

Their was an idea floating around that people were more likely to leave their wallet at home than their phone. I'm not sure where that idea came from, it's always seemed unlikely to me. Retailers in a lot of cases are installing the new POSs that read a tap from a credit card. It's the same hardware to read a tap from a phone (both are NFC), so it doesn't cost them any extra. The tap-to-pay really is convenient for low value transactions (usually $50) because you don't need to enter a PIN.

Re:WTF does it do for me? (1)

vidnet (580068) | about 3 months ago | (#46993251)

why is paying by phone so much better than with plastic?

Why is paying with plastic so much better than by phone? Here's a transaction I had yesterday at Toys'R'Us:

1. In line, I unlocked my phone and found my loyalty card
2. The cashier pointed a scanner at my phone and read it
3. I already had the phone unlocked in my hand, so I touched it to the payment terminal.

What would I have gained by putting down my phone and taking out and swiping my credit card instead?

Re:WTF does it do for me? (1)

mattack2 (1165421) | about 3 months ago | (#46993327)

Not have to carry as many rewards/credit cards in your wallet/on your keychain?

Re:WTF does it do for me? (1)

mattack2 (1165421) | about 3 months ago | (#46993369)

Uggh, not having.. or "to not have to..."

Re:WTF does it do for me? (1)

fahrbot-bot (874524) | about 3 months ago | (#46993413)

Not have to carry as many rewards/credit cards in your wallet/on your keychain?

Easy. I have no reward cards and one (platinum) CC - paid off each month.

Re:WTF does it do for me? (2)

mattack2 (1165421) | about 3 months ago | (#46993461)

Well, then you're paying more than you need to. I pay off my credit cards too, but use at least 2 regularly. One for restaurant purchases (almost 3% back), one for grocery store (IIRC 2% back)... and several rewards cards.

Re:WTF does it do for me? (1)

bberens (965711) | about 3 months ago | (#46993343)

Soon the US will enter the modern world and require chip and pin for all credit card transactions. When this happens every restaurant will require those little hand held devices that they can bring to your table to allow you to enter your pin. These devices break, are a hassle to keep charged, and are generally a pain in the butt. The most reliable device, by far, is the phone you have in your pocket. I can't wait for the day when my receipt has a 2-d barcode that I scan which allows me to pay via a Paypal/Google Wallet type system. That way I don't have to trust your crappy POS system your restaurant bought on ebay to secure my credit card data. I can choose from a number of trusted vendors to secure my data and handle the transaction.

Inherently Insecure (1)

Anonymous Coward | about 3 months ago | (#46992533)

Putting a wallet on a mobile phone that is not the least bit locked down, and has god knows what else installed on it. Then being the information through the air to be intercepted by some enterprising hacker. Yep convenience and security. But its all failing because of back room deals.

Re:Inherently Insecure (3, Insightful)

onproton (3434437) | about 3 months ago | (#46992603)

It's not like swiping your credit card in the 'traditional' manner is much better.

Sure it is (2)

CauseBy (3029989) | about 3 months ago | (#46992705)

Sure it is. If a hacker gets my CC info and makes charges, my loss is limited to hassle and frustration. If a hacker gets my BTC info, I lose my BTC forever. That makes BTC like cash, which sure can be stolen, but to steal my cash you have to walk up to me and get my wallet away from me. A wallet thief can only rob a handful of people per day, whereas a BTC thief can take a hundred million dollars from ten thousand people in one night.

There are lots of tradeoffs for all these different systems. None of them are exactly perfect but none of them are worse than all the others in every way. Each has different strengths.

Re:Sure it is (1)

Archangel Michael (180766) | about 3 months ago | (#46993233)

This is why you have a small "online" wallet for carrying around "cash" and use for online purchases, while you have another "offline" wallet, that you store in three different places with a very long hard to crack password that nobody else knows.

It is like cash, so treat it like cash, and store excess in a Vault. Why this is so hard is beyond me.

Re:Sure it is (4, Insightful)

lister king of smeg (2481612) | about 3 months ago | (#46993307)

Sure it is. If a hacker gets my CC info and makes charges, my loss is limited to hassle and frustration. If a hacker gets my BTC info, I lose my BTC forever. That makes BTC like cash, which sure can be stolen, but to steal my cash you have to walk up to me and get my wallet away from me. A wallet thief can only rob a handful of people per day, whereas a BTC thief can take a hundred million dollars from ten thousand people in one night.

There are lots of tradeoffs for all these different systems. None of them are exactly perfect but none of them are worse than all the others in every way. Each has different strengths.

Do you keep your entire life savings in cash in your dead cow wallet? no? then why would you keep it all in your mobile cryptocurrency wallet? have a offline wallet at home for you savings and carry you spending money in you mobile wallet problem solved.

Re:Sure it is (1)

fahrbot-bot (874524) | about 3 months ago | (#46993475)

Do you keep your entire life savings in cash in your dead cow wallet?

I keep my entire life savings stored in a *live* cow wallet. It "moos" a LOT -- but it's a bit cranky and stealing from it is only for the very brave...

Re:Inherently Insecure (0)

Anonymous Coward | about 3 months ago | (#46992709)

It all beats cash. People with modern devices and cards have never held me up in line like old people trying to get their cash together.

Re:Inherently Insecure (1)

jythie (914043) | about 3 months ago | (#46992997)

While swiping a credit card has risks associated with it, the transaction is generally backed up by one's issuing bank, thus if someone does screw you over, you have essentially a line of insurance to protect you. Most of the time you can get the full amount back.

Regular Wallet (4, Insightful)

PvtVoid (1252388) | about 3 months ago | (#46992543)

If I have to carry something around in order to pay for shit, a regular wallet works just fine. With actual cash in it.

Re:Regular Wallet (4, Insightful)

Noah Haders (3621429) | about 3 months ago | (#46992583)

even if you have a mobile wallet, you'll still need your plastic CCs as well. and debit card. also, wallets have driver license, insurance cards, etc. and cash. so there's no way to replace your regular wallet with your phone. so what's the benefit to consumers?

Re:Regular Wallet (2)

healyp (1260440) | about 3 months ago | (#46992887)

It's my hope that we can get past all of that as well. GEICO, Cigna and Liberty Mutual have apps for your insurance cards already. I'm hoping that one day the various DMVs can move to an electronic ID card as well. It works for Estonia doesn't it?

Re:Regular Wallet (0)

Anonymous Coward | about 3 months ago | (#46993281)

When you are unconscious at the hospital, the police and medical personnel will not try to figure out how your mobile phone works and if you have an insurance card app. Your phone is probably broken anyway, while a physical card is more likely to have survived enough to be readable or at least hint at the insurance company to contact.

Re:Regular Wallet (3, Informative)

praxis (19962) | about 3 months ago | (#46993365)

I would never hand over an unlocked phone to a police officer so he can take it back with him to his cruiser to "copy down the information".

Re:Regular Wallet (5, Interesting)

Splab (574204) | about 3 months ago | (#46992903)

In Denmark, Mobile Pay is a massive success, users can transfer money to each other, split bill etc.

The value added as a consumer using Mobile Pay, rather than CC, is the fact that we can instantly settle our "debt". No more "I bought round number 4, so I'm not up for another now", someone goes and pays with their CC (or using mobile pay in the places that accept that) and can instantly deal with the bill among their peers.

Almost 25% of the population has adapted this solution in less than a year.

Re:Regular Wallet (1)

Noah Haders (3621429) | about 3 months ago | (#46993423)

true. a mobile wallet definitely provides benefit to consumers. but the greatest benefit would come if we replaced a real wallet with a mobile wallet, and i don't think this is possible. I think the best solution would be if Apple or Amazon provided the service. This isn't a technological point of sale problem, but a network money transfer problem.

I can't see a benefit, so there is none... (1)

langelgjm (860756) | about 3 months ago | (#46993237)

... is a time-tested Slashdot commenting strategy!

But seriously, I don't always carry my wallet with me, but I almost always carry my phone with me. Last year I found myself in the perfect position to benefit tremendously from a mobile wallet on my phone.

I was on mile 4 of a long bike ride when my rear tire failed. Not the tube (I carry a spare), the actual tire. I had decided not to bring my wallet with me, but I did have my phone. Anyway, I needed a replacement tire, but I had no money on me, and I realized that despite having my credit card number memorized, I didn't actually have any direct way to pay a bicycle shop for a tire, so I walked home.

But it felt silly - that I was carrying around a smartphone that has access to multiple bank accounts and payment services, and that I even knew my credit card number, yet without a little piece of plastic, I couldn't pay for anything.

Since then I don't go on bike rides without my wallet, but that's not really the point. Sometimes I take walks and don't want to bring my wallet. Occasionally I change my mind on the way home and decide it would be a good idea to stop at the grocery store. But no wallet, no way to purchase anything, despite having my phone.

In other words, there do exist situations in which one might reasonably have a phone but not a wallet. You may argue they are edge cases, but I am just one person. Other people mentioned check splitting, which is especially a headache in recent years since no one seems to carry cash anymore.

Re:I can't see a benefit, so there is none... (1)

Noah Haders (3621429) | about 3 months ago | (#46993389)

I'm not saying there's not benefit to mobile wallets. but what I'm saying is that the greatest benefit from mobile wallets would be if you didn't need to carry regular wallets, but that's not the case for a variety of reasons and it makes mobile wallets less compelling.

I was on mile 4 of a long bike ride when my rear tire failed. Not the tube (I carry a spare), the actual tire. I had decided not to bring my wallet with me, but I did have my phone.

I highly recommend you always bring driver's license or other ID and insurance cards with you, in case paramedics need to scrape you off the pavement and take you to the hospital. this happened to me just 6 months ago, although in a car accident not a bike accident. one second I'm behind the wheel and the next second in the emergency room. no serious injuries thank goodness but glad I had the ID with me. obv behind the wheel the license is mandatory anyway, but the health insurance card was vital and I'm sure influenced the type of care i recieved (i.e. they knew it would be reimbursed).

Re: Regular Wallet (0)

Anonymous Coward | about 3 months ago | (#46993487)

Also, easier access to payment history, authorized recipients, blacklisted debtors and analysis tools. Put in the hands of geeks it could be quite useful.

Re:Regular Wallet (0)

Anonymous Coward | about 3 months ago | (#46992617)

If I have to carry something around in order to pay for shit, a regular wallet works just fine. With actual fiat currency in it.

FTFY.

Re:Regular Wallet (0)

Anonymous Coward | about 3 months ago | (#46992669)

If I have to carry something around in order to pay for shit, a regular wallet works just fine. With actual fiat currency in it.

FTFY.

An excellent point. Although lugging all that gold around really hurts my back. moron!

Re:Regular Wallet (2)

PvtVoid (1252388) | about 3 months ago | (#46992677)

If I have to carry something around in order to pay for shit, a regular wallet works just fine. With actual fiat currency in it.

FTFY.

As long as literally everybody on the entire planet [wikipedia.org] accepts it, who gives a fuck?

Re:Regular Wallet (0)

Anonymous Coward | about 3 months ago | (#46992829)

>As long as literally everybody on the entire planet [wikipedia.org] accepts it, who gives a fuck?

Absolutely no one who's smart enough to see through Ron Paul's derp. The gold-standard people are idiots.

Re:Regular Wallet (1)

Archangel Michael (180766) | about 3 months ago | (#46993287)

BitCoin is Fiat Currency for sure, but it is not like current USD money, in as much as there is no "FED" that can change the value at the drop of a hat, and who props up big Government/Corporation complex at the expense of the average American. So in that regard, it is FIAT but closer to GOLD (which has some FIAT value) in as much as you can get gold by mining or buying it. Mining is hard.

Fiat currency? Give me money I can drive. (1)

tepples (727027) | about 3 months ago | (#46993091)

Q. When is Fiat currency not fiat currency?
A. When it's pegged to the price of an automobile.

Actual Fiat currency would be an interesting concept, sort of like taking Canadian Tire money one step further. People could exchange goods and services for gift certificates denominated in micro-Fiats, and any licensed driver could turn in a million micro-Fiats for (imitates The Price Is Right announcer) A NEW CAR!!!!11 [fiatusa.com]

Re:Regular Wallet (0)

Anonymous Coward | about 3 months ago | (#46993137)

Getting out cash is a pain. I try to only do it once or twice a month. Everything else - cards. My wife now uses the phone for Starbucks, I go there so rarely I haven't bothered.

Why they're really doomed... (5, Insightful)

Maltheus (248271) | about 3 months ago | (#46992569)

I barely trust using my phone to log into a social network, let alone anything that might cost me money. With every app attempting to spy on each other, I would never trust my phone for financial transactions. Not for many years to come.

Re:Why they're really doomed... (0)

Anonymous Coward | about 3 months ago | (#46992675)

The hill of trust is a steep hill to climb.

Re:Why they're really doomed... (1)

pitchpipe (708843) | about 3 months ago | (#46993121)

The hill of trust is a steep hill to climb.

But they're not even attempting to climb that hill. They're digging holes because that's where the money's at.

Holes of trust

Re:Why they're really doomed... (1)

Graydyn Young (2835695) | about 3 months ago | (#46993119)

In a mobile wallet, your financial data isn't stored in regular memory. There is a device in your SIM called a Secure Element which talks directly to a POS. Apps on your phone have zero access.

Re:Why they're really doomed... (2)

AmiMoJo (196126) | about 3 months ago | (#46993195)

So where are all the apps that steal money from people's Apple or Google accounts via their respective app store apps? Why aren't Japanese consumers, who have had this for years, plagued with fraud? Do you ever buy stuff online with your computer, and if so why is it more trustworthy? Did you know phones sandbox every app? I don't think you have a very good grasp of how the security of e-wallets works, or phones for that matter.

Re:Why they're really doomed... (1)

Pitawg (85077) | about 3 months ago | (#46993403)

Phones have an access range of the global internet and cell network. My wallet is in my sandbox with an access range of arms length. There is no virtual gun protecting that phone while it is powered and has a signal. My wallet even works in a storm with blackouts.

Secure device? (1)

GPS Pilot (3683) | about 3 months ago | (#46993477)

"it's natural to consider loading payment information onto that secure device"

Is there any such thing as a "secure device"? I'm aware of several types of devices that were initially proclaimed to be secure, and subsequently hacked.

well, not everybody (2, Funny)

turkeydance (1266624) | about 3 months ago | (#46992581)

is carrying around ALL their DEBITS and ALL their CREDITS in their pockets. i diversify with a mattress.

" that secure device " (1)

Anonymous Coward | about 3 months ago | (#46992593)

" that secure device "

Since when? Smartphones are not secure.

Other countries (2)

richtopia (924742) | about 3 months ago | (#46992597)

Just let these innovations arise in other countries if the USA has such a backwards infrastructure. Even credit cards are more secure in other countries (chip and pin may be flawed, but it is still better than the magnetic strip and signature of the USA).

Magnetic Strip flaw? (0)

Anonymous Coward | about 3 months ago | (#46993059)

Write "Check Identification" on the signature line and have a photo ID; no more flaw. Something you have then becomes your credit card, your photo ID and your face, which is a bit harder to get than just your card and pin. And who cares if someone uses your credit card you aren't using, anyway? Deny the charges, cancel the card, get a new one.

Re:Magnetic Strip flaw? (1)

CountZer0 (60549) | about 3 months ago | (#46993165)

I've done this for years. Problem is, only about one in 20 clerks actually check my ID anyway! I always make a point to thank them when they get it right.

Re:Magnetic Strip flaw? (1)

Shakrai (717556) | about 3 months ago | (#46993263)

Technically this voids your credit card. Read the line above the signature panel, "Authorized signature - not valid unless signed."

The standard merchant agreement says that merchants are supposed to check the signature panel on the back of your card and compare it against the receipt. They are not allowed to ask for ID (or to impose minimum purchase amounts or fees for that matter) unless the signature does not match. If the card is not signed they're supposed to decline to use it.

Of course, very few merchants actually read the agreement they've signed, much less follow its rules. They do this at their own peril, for they're the ones on the hook for fraudulent transactions.

Square's real challenge - chip and pin (2)

rsborg (111459) | about 3 months ago | (#46992609)

I'd be very interested to see how they approach that. Well, any internet payment mechanism is going to struggle with chip and pin, I suppose.

More payment middlemen (0)

Anonymous Coward | about 3 months ago | (#46992613)

I challenge you to find out how many middlemen your money goes through between your bank account and the entity you're paying money to.

Immobile wallet (3, Funny)

Bradmont (513167) | about 3 months ago | (#46992633)

So I need to go back to lugging my safe around?

Re:Immobile wallet (2)

Mad Bad Rabbit (539142) | about 3 months ago | (#46992803)

No, everyone's switching to Rai Stones [wikipedia.org] .
You leave them on whatever Pacific Island they were quarried on, and just update the ownership record.

Re:Immobile wallet (1)

tepples (727027) | about 3 months ago | (#46993497)

That's how paper money was supposed to work back when it was backed by metal. You leave the gold in storage, and you trade ownership records as currency.

What I love about credit cards (4, Insightful)

Anonymous Coward | about 3 months ago | (#46992695)

Is that I have to plug them in to charge for 3 hours before I can use them to buy a coffee...

The first time I get stuck somewhere because my phone died and I was unable to pay for a bus or taxi is also the last time I rely on mobile payments.

Doomed? They Were Never Viable. (3, Insightful)

NotSanguine (1917456) | about 3 months ago | (#46992741)

Please. This is a "solution" in search of a problem. And not even a good solution. All the CC companies in the US are (finally) being forced to implement chip-and-pin. Do you really think they're going to switch off of that for something even less secure than a standard CC? Not that they really care about security.

Besides, There are so many entities (not counting the malicious ones) tracking what goes on your smartphone, do you really want to trust your money to an app on one of these? If so, please use my app. It's complicated to set up, so please send me all your financial information and I'll get things going for you. You may notice some charges or emptying your bank accounts, but that just me making sure everything is working properly.

Re:Doomed? They Were Never Viable. (5, Informative)

AmiMoJo (196126) | about 3 months ago | (#46993041)

E-wallets have been popular in Japan for years. They are extremely convenient, especially if you use public transport a lot (and Japan has good public transport). No more messing about with change at the convenience store either. Vending machines take them too. As an added bonus there is no receipt to throw away, that gets stored on your phone/online account automatically as well.

Business users love them because they can easily import the receipts into Excel and file an expenses claim. Everyone else just finds it easier to pay for stuff at the end of the month via their mobile bill, instead of loading up a stored value card or fishing for change every time.

I hate coming back to the UK and having to deal with all this crap just to buy stuff. Some places can just about cope with contactless debit cards now, but if you have more than one in your wallet you have to get it out or a random one will be charged. My phone is nice and separate.

Re:Doomed? They Were Never Viable. (1)

PvtVoid (1252388) | about 3 months ago | (#46993223)

E-wallets have been popular in Japan for years. They are extremely convenient, especially if you use public transport a lot (and Japan has good public transport). No more messing about with change at the convenience store either. Vending machines take them too.

If I could get here what you can get from a vending machine in Japan [heavy.com] , I might want one too!

Public transit would be a very useful application for an e-wallet, especially in Tokyo with all those incompatible rail lines where you have to pay to transfer trains. But that could be solved by a dedicated transit pass which auto-recharges from a credit card account, sort of like the EZPass does in the U.S.

Re:Doomed? They Were Never Viable. (2, Interesting)

Anonymous Coward | about 3 months ago | (#46993519)

You could manage the same thing with a prepaid card with contactless payment. This is what is used in London (Oyster), at least for public transport. No change required, but no issue with battery life.

Contactless debit has got very common this year.

Re:Doomed? They Were Never Viable. (0)

Anonymous Coward | about 3 months ago | (#46993131)

Do you really think they're going to switch off of that for something even less secure than a standard CC?
 
Sorry but I bought a 2800 dollar laptop with my CC that has no signature on the back and no PIN without the blink of an eye while I can't "charge" $5.56 worth of coffee and pastry to my Starbucks app without my PIN.
 
Which one is less secure again?

Re:Doomed? They Were Never Viable. (1)

Graydyn Young (2835695) | about 3 months ago | (#46993309)

I agree that it's a solution in search of a problem. But the CC companies don't need to switch off of chip-and-pin to support mobile wallets. Have you noticed that you can tap a chipped credit card against the new generation of POS devices to pay? If you can do that, you can tap an NFC phone as well. Ever noticed how the chip in your credit card looks a lot like a SIM? Not a coincidence, it's the same underlying Smart Card tech.

And about the malicious entities, this really isn't as big a problem as what your picturing. A wallet app is really just a UI. All the meat goes into your Secure Element. Your card info gets put in remotely by a trusted authority, and is read directly off the chip by a POS. Apps on your phone don't have access to it.

Blame the people who disagree with you (3, Insightful)

fermion (181285) | about 3 months ago | (#46992777)

Mobile wallets have not provided inconvenience for consumers. In most of these case where widespread adoption has not occurred it is because the entrepreneurs are trying to get the consumer to adjust to their business model instead of working a business model that suites consumers needs. We say this a lot in the late 90's when companies would create web sites that just mimicked the corporate org diagram. Unless you were part of the organization, there was no way to figure out where anything was. Bad web developers still do this.

There are specific examples the implementation fails. For instance Starbucks has a good implementation, but many Starbucks does not accept the card. Why am I going to have something that is useless. It also by default wants to annoy you every time you go by a Starbucks. We see the same thing with CVS. It is nontrivial to pull up the card, and easier just to type in a phone number.

Most of the digital wallet is just gather information on consumers without providing value in return. Like a grocery store loyalty card. Sure, some are going to use it. Some are going to shop at the store because of perceived value. But many are going to the store that just provides simple service. Walmart does not have a loyalty card.

That's adorable. (1)

fahrbot-bot (874524) | about 3 months ago | (#46992905)

If everybody is always carrying around a powerful computer in their pockets, it's natural to consider loading payment information onto that secure device as an alternative to cash or plastic cards.

The summary used the words "computer" and "secure" in the same sentence as "payment information".

Mobile wallets not supported (1)

Chef Jesse Kmiec (3533883) | about 3 months ago | (#46992927)

I've always been a fan of the mobile wallet concept. I have a Google wallet account and spent the money for the NFC sim and all. Then I discovered absolutely No one in my town (major US city here not a backwater hill town) is set up for it. Sure a few have tap and pay card readers but those as a general rule are not programmed to accept and virtual wallet. I hope one day we get to the point where it is common place to use NFC payment systems at most major stores but I do not think it will happen anytime soon.

Re:Mobile wallets not supported (1)

praxis (19962) | about 3 months ago | (#46993443)

Then I discovered absolutely No one in my town (major US city here not a backwater hill town) is set up for it.

When it comes to payment infrastructure, most major US cities are effectively backwaters.

Public Transportation (0)

Anonymous Coward | about 3 months ago | (#46992963)

I wish an institution like the MTA or NJ Transit would adapt mobile payments for Public transportation. I would be on-board with that.

Re:Public Transportation (0)

Anonymous Coward | about 3 months ago | (#46993085)

LA has TAP cards [taptogo.net] . They're not perfect, but they're a heck of a lot better than having to fish around for correct change, request transfers, etc. Almost all of the regional transit systems take them as well.

Re:Public Transportation (0)

Anonymous Coward | about 3 months ago | (#46993437)

I wish an institution like the MTA or NJ Transit would adapt mobile payments for Public transportation. I would be on-board with that.

I see what you did there

Meh. NFC is still coming. (2)

swillden (191260) | about 3 months ago | (#46992985)

(Note: This comment is US-centric. I'll let others do the analysis for the rest of the world, but the case is actually easier there.)

NFC is still coming, and soon. Now that any Android 4.4+ device can use Google Wallet and with ISIS deployed to AT&T, Verizon & T-mobile customers who want it, one half of the secure mobile payments infrastructure problem is all but solved. Android 4.4 includes open APIs so that anyone else can implement NFC payment apps, also, and there are rumors of many coming. There are hints that Apple is also doing something with NFC.

The other half of the infrastructure problem is merchant acceptance. Visa and MasterCard announced in 2012 (IIRC) that the liability shift will be implemented end of 2015. What that means is that after the shift takes place, any merchant will be able to completely stop paying for any credit card fraud simply by deploying chip (including NFC) payment terminals. Given that merchants pay for nearly all fraud, and that it costs many billions annually, you'll see them moving fast. Already in some parts of the country I can go through a whole day using nothing but my phone for payment, and it's improving rapidly.

It's about a decade later than when the industry thought it would be but contactless smart card / NFC payment is in full rollout mode now.

Square is wise to drop their custom, proprietary solution to a problem that has an industry-standard solution in deployment.

Re:Meh. NFC is still coming. (0)

Anonymous Coward | about 3 months ago | (#46993439)

ISIS has the same problems as Google Wallet:

1: You need an ISIS approved credit card. This means you need to get an Amex or Wells Fargo line of credit.

2: ISIS requires a new SIM card because of the app installed.

3: ISIS is choosy about what phones it uses, and what ROMs. Got a rooted phone, ISIS will give you the middle finger.

4: ISIS has competition. Paypal, Google Wallet, and many other places are vying for retailer point of sale terminals. This means that there is not a high chance that you will be able to use it.

5: No iOS device supports it, nor are there any publically announced plans of Apple doing so in the future.

ISIS is a nice start, but it is a version 0.1. It has a long ways to go, and there are many entrenched competitors with as good, if not better products.

Phones abandoned by their sellers (1)

tepples (727027) | about 3 months ago | (#46993503)

Now that any Android 4.4+ device can use Google Wallet

The rest of the problem becomes getting manufacturers and carriers to push out Android 4.4 images.

who (0)

Charliemopps (1157495) | about 3 months ago | (#46993003)

Who the hell is Dan Rowinski and how does he know anything about mobile wallets and payments? He cites no references in his article other than other articles HE wrote and some anecdotal story about a coffee house he stops at in the morning. He provided a link to their website so I guess we could stop by and ask them if he's full of it or not.

Since we're on a roll, I declare balding middle aged men the new fashion trend that 20 something women just can't resist. For example, at lunch this cute redhead smiled at me while I was at the local Arbys. Citation: http://arbys.com/ [arbys.com]

Ladies that want to be hip and cool can PM me.

Re:who (3, Informative)

Dan Rowinski (3618667) | about 3 months ago | (#46993187)

I am the senior writer and mobile editor of ReadWrite and have been writing about mobile payments for years now. Thank you. And actually, I didn't add that link to the coffee shop, one of my editors must have put it in. What would you like to discuss, Mr. Mopps? I have discussed mobile payments solutions with just about every company that is in the game and many of the analysts firms that follow payments. The harsh reality of the mobile wallet is not something that I pulled out of thin air. My conclusion is based on evidence of consumer usage (both empirical and data driven), the performance of these apps, talking to merchants and other various field research and the actions of the companies for almost five years. Google Wallet? Isis? Square? LevelUp? All have issues affecting adoption ranging from merchant adoption to conflicting industry interests to consumer behavior, privacy and security. What do merchants want? Low interchange rates. What do consumers want? The ability to use a payment method wherever they go while deriving value from it. What do big tech and payment processors want? A slice of the pie and will cut the other company's hamstring to do it. Payments are hard ... for so many different reasons and every single hyped mobile wallet that has been released to the consumer market has, in one form or another, failed. Thank you.

Re:who (0)

Anonymous Coward | about 3 months ago | (#46993471)

This is the best rebuttal to a troll I've read in a long, long time. Bravo, sir!

Re:who (0)

Charliemopps (1157495) | about 3 months ago | (#46993499)

I am the senior writer and mobile editor of ReadWrite and have been writing about mobile payments for years now.

Ok, that means you're probably good at typing and spelling. You're at least ahead of me on the spelling bit. Congrats.

My conclusion is based on evidence of consumer usage (both empirical and data driven),

Great! Links? Or do I have to scroll through every post you ever made because your post is just the most recent car in your train of thought?

...for so many different reasons and every single hyped mobile wallet that has been released to the consumer market has, in one form or another, failed.

yada yada... again, you're just trying to make an argument. It's not facts based (you know, news) I can totally understand making a rational argument. Hell, we all do it here on slashdot replying to stories like this one. But linking to what is nothing more than a blog post with 0 references at all is not news. You're declaring an entire industry is dead with absolutely no evidence other than that you think people don't want what they are selling. That's not news, that's opinion.

Here, I'll cite data to support your opinion for you:
http://www.foxbusiness.com/mar... [foxbusiness.com]

That's how easy it is.
No offense meant, but did you really think you could cross post your article to slashdot, have 0 references in it other than yourself and not be given a hard time? lol, welcome to Slashdot

Meh (1)

ADRA (37398) | about 3 months ago | (#46993163)

A few facts that aren't going away any time soon:
1. There are 1000 different e-wallet based solutions which are swiss cheese of compatibility with the few number of retailers that have even bothered to look into them (These have fees as well mind you, just possibly less than CC transactions)
2. There are many loyalty reward cards / apps that do what you want quite well but only for specific customer/retailer relationships
3. Easy solutions that are both ubiquitous/cheap/secure would basically require the entire industry to jump onto a single standard who's fee schedule is really low / non-profit and who's infrastructure services / equipment are interchangable

If its not easy, customers will just use Credit Cards or cash
If its not ubiquitous, you may as well just use a rewards/points card program
If its not cheap, retailers may was well use credit cards because at least its a system well understood and comfortable with
If its not secure, retailers are on the hook for fraud and it will likely not be ubiquitous because which retailer would want to carry large purchase liability

All in all, its a 'solution' that on a green field may work. The articles frankly a utopian paradise where the slightly cheaper solution would require the entire infrastructure of our retail commerce system to be ripped out and replaced overnight in order to be feasible.

Lastly, by far the most important facet of any of these schemes is TRUST. If you don't have consumer trust in your transaction products, you won't have consumer buy-in. Loyalty cards have the maximum loss of whatever you've refilled them. CC/Bank cards generally have historically adequite means of limiting liability of holders (at the expense of retailers). What does this new system have to verify that my cash is safe with them?

It needs to beat the current solution (1)

Anonymous Coward | about 3 months ago | (#46993299)

When exercising, I have a wallet pull-out that holds my driver's license and a credit card. It is extremely thin, I can swim with it, get it dirty, drop it, run it over with a bike, while never having to worry about it's power level. Yet I can use it for almost any financial transaction short of buying a house. If stolen, I am not responsible for the unauthorized purchases.

Top that and we can talk.

In the 35 years I have paid with my debit card ... (1)

aix tom (902140) | about 3 months ago | (#46993325)

... it never once ran out of battery.

The only phone that never run out of battery in that period was the one bolted to my wall or standing on my desk.

Re:In the 35 years I have paid with my debit card (1)

Anonymous Coward | about 3 months ago | (#46993479)

Here in the US I started seeing the ability to use debit cards at the cash register circa 1999.
I can't find any information online about a debit card system operating in any country before 1982.
Where are you?

Why would anyone volunteer for uber-tracking? (0)

Anonymous Coward | about 3 months ago | (#46993355)

No one benefits from a third-party corporation doing transactions. From day one, I never could figure out why a person would want a corporation to track their purchases and build a profile of their shopping, nor why a company would want a corporation to track their sales data.

Frankly, no one has all the data needed to truly track someone's purchases and online habits. Some parties have the online part, and some have the financial part, but no one has it all. That's the last goldmine left in exploiting personal information for profit, and it's attracted the most greedy, venal, and awful type of people to try to get the money, but no one is going along with it. I hope they all die. Otherwise we'll live in a world where every purchase is tied to online habits, and every second of every day will be a marketing and advertising blitz like the world has never before seen. Humanity will stop being human, and be only "consumers".

I like my mobile wallet (1)

YoungManKlaus (2773165) | about 3 months ago | (#46993509)

its brown and leathery and contains a whole lot of money and other useful stuff :)

duopoly + not much value added = does not work (0)

Anonymous Coward | about 3 months ago | (#46993527)

I think there are two main reasons why it does not work
1) because there's a duopoly on payments, Visa and Mastercard; add to that that everybody else wanted to control the mobile wallets, the operators, Google, the manufacturers, etc. so nobody did because they did not cooperate, they were greedy.
2) because it adds very little compared to what we have now, in other words, the added value is not enough to break the Visa/Mastercard duopoly.
If there were hundreds of payment processors and card issuers, the system would not be entrenched as each POS would need flexibility to handle all that diversity. In the current situation, the POS only handle Visa and/or Mastercard, so only them can push for changes, like they are doing with the "tracker cards", the RFID insecure cards they force everybody to use now.
They want everybody to use them not because they are better, but because they will be able to monetize them better by selling costumer tracking (those cards are beacons and you only need to slightly modify the "thief detectors" to track who enters and leaves a place, even if they pay with cash). They already sell your buying habits! Now they will also sell where you go and not buy!.

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